AN ADMIRAL SAYS 'AYE, AYE' TO THE SAILORS

One of the best places to start to foster innovation is at the frontline — engaging the people who do the work about the ways they do the work. That sounds too simple to create transformation, but sometimes the simplest actions are the catalysts for powerful results.

A friend recently shared with us a great example of this in a Fast Company article about a Navy admiral, D. Michael Abrashoff. Working with his sailors, Abrashoff transformed his ship, the USS Benfold, from a hierarchical organization where underperforming sailors dreaded their time at sea into a ship with committed sailors and a reputation for being among the best in the Pacific fleet. He used three unconventional tools for the transformation:

1. Dismantle hierarchy


2. Constantly ask his crew “Is there a better way to do this?”


3. Build fun into their work experience

His overarching philosophy when he took command of the Benfold was to shift the crew’s focus from being order takers who constantly looked upward for direction to an organization built on purpose and personal accountability. In the process, he saved the Navy hundreds of thousands of dollars, engendered the commitment and creativity of his crew, and enhanced his career — even though the latter result was something far from his intention.

One of the first things he did was schedule time to interview every member of the crew, making sure to ask: “What would you differently around here if you could?” Their answers not only created a better espirit de corps, it also improved the ship’s combat readiness. He also found out what their lives’ goals are and took steps to help his guys achieve them.

And his ultimate secret ingredient — make sure people were having fun. That’s not always easy to do on a ship that is on the seas for months at a time, but he made it a priority. For example, his supply officer found pumpkins in the Middle East so the crew could have a carving contest. He found an Elvis impersonator to put on a Christmas show.

By focusing on the people who do the work, the ship became one of the most innovative in the fleet. Any organization that is looking for ways to innovate should salute this guy.

FREEDOM: ANOTHER WORD FOR INNOVATION

So many organizations see freedom as a “problem” to managed when in reality, it is one of the keys to fostering innovation. Organizational bureaucracy may have made more sense during the Industrial revolution when the marketplace demanded scale, efficiency and repetition, but in today’s complex, rapidly changing marketplace, it only gets in the way of creativity and fresh ideas.

We agree with Ed Scanlan, CEO of the Chicago firm Total Attorneys, who asserts that personal freedom promotes creativity and risk-taking. According to an article at CNN Money, Scanlan’s firm encourages employees to take paid sabbaticals, with the understanding they’ll do something outside the bounds of their professional life, like making art or playing music. They come back work refreshed and full of ideas.

Other ways to inspire innovation:

• What might be seen as “wasting time” — by reading widely or cultivating a diverse wide circle of friends or traveling to unusual place — can actually help you see things in different ways.


• Develop curiosity. Look behind walls to see what is holding them up before you start knocking them down. Resist the temptation to quickly proffer your own point of view, and ask questions about how others see things, and where their thinking comes from.


• Get out of the office once in awhile. Do something you wouldn’t normally do — see a play, go bowling, try an ethnic restaurant, watch a skateboard competition. While you’re spending time outside your comfort zone, it’s fertilizing your brain, making it more likely that ideas will sprout.


• Encourage risk-taking, and look for what can be found in the rubble of failure. Thomas Koulopoulos, author of the Innovation Zone, emphasizes that small failures will pave the path to big successes. "You need to give people the license to take risks and to fail often enough to realize that they will not be punished for doing the right thing, even though the outcome might not be what they expected," says Koulopoulos.


• Who are you hiring? Maybe the perfect candidate isn’t the one with the exact experience and skill set you think you need.  Look for people with unusual backgrounds, who will bring fresh perspectives to the business.


• Look for ways to convene the large group for cross-fertilization. Too often meetings are held horizontally – with work teams — or vertically, with a room full of managers or one specific function. Bring together a large cross-section of the organization to solve specific business issues in real time. And for extra spice, invite a few rogue outsiders — the director of a children’s museum, someone who runs a yoga studio, or a garage mechanic.

Innovation can be sparked by many things, but it’s rarely found by doing the same old thing, over and over again. Chaos and uncertainty might feel uncomfortable, but will lead to the adaptation and innovation necessary for survival.

MAKE A MISTAKE AND LEARN SOMETHING

One way to diagnose whether your organization is maximizing its potential is to answer this question: How are mistakes viewed and dealt with?

Are they feared for the negative consequences that will be rained on someone’s head? Are they furtively hidden to avoid exposure?

Or are mistakes celebrated as learning opportunities? Are those who risk and fail applauded for a “good try that didn’t work?”

As we’ve written about many times, organizations that center their conversations on “holding others accountable” are sending employees a strong message that they should do as their told. That might get employee compliance, but it won’t unleash the diversity, creativity, and independent decision-making that could strengthen the organization and foster innovation. “Compliance” by definition requires conformity, which discourages risk-taking and critical-thinking skills, which are essential for developing superior results.

Research done by Jennifer Lerner of Carnegie Mellon University and Philip Tetlock of Ohio State University has shown that many employees base their performance decisions on gaining the favor of those to whom they are accountable — typically supervisors — rather than thinking through what the business and its customers really need.  Sheena Iyengar, in her recent book, The Art of Choosing, points out that organizational systems designed to “hold others accountable” stifle freedom and encourage people to do less than they are capable of, which stifles innovation.

For example, an employee who is tempted to bend rules to better serve a customer might choose instead to doggedly follow company policy for fear of being discovered by the supervisor, who has the ability to influence rewards and punishments. They don’t want to be seen as “making a mistake” when it could influence their rewards (approval, benefits, salary) or avoiding punishment ( betting yelled at, a bad write-up, a negative performance evaluation).

What’s the alternative? One of them is to embrace, celebrate and be grateful for mistakes.  Vineet Nayar, author of Employees First, Customers Second: Turning Conventional Management Upside Down asserts in a recent blog posting that there is “growing evidence to suggest that innovation flourishes when people are given the space to make mistakes.”

Why? Because if people aren’t making mistakes, they are not learning. And if employees aren’t constantly learning, the organization is stagnating. Stagnation is a dangerous environment for organizations that want to survive in a rapidly changing marketplace.

HEALTHY BOTTOM LINES START WITH BUSINESS LITERATE EMPLOYEES

Under normal circumstances, would you pay your customer $460 to purchase a $40 product?

Not if you want to stay in business. Yet that sort of business practice happens more often than people realize. I happens because employees with the most customer contact often have the least knowledge, resources and authority to make decisions that serve the business. Unless organizations begin change that, we guarantee it will continue to have a negative effect on quality, profitability, cycle time and unique response.We’ve had this point driven home by several negative customer service experiences, including a recent incident with a large, well-known company.

Due to a misprint in a catalog, the wrong product was shipped to us — twice. Over the next few weeks, we spent nearly seven hours with call center employees and/or their supervisors trying to get the order corrected. At times we were left on hold for up to 20 minutes. We dogged the issue until we got a second-level supervisor on the phone. After repeating our saga for the umpteenth time, she apologized and arranged to have the coffeepot we wanted shipped express – at no charge to us. It took six weeks to satisfy our order even though the product had been in stock the whole time.

While we appreciated the resolution, by our calculations, a mistake that could have been quickly resolved with one phone call ended up costing this company:

• Shipping costs for three regular deliveries and one express delivery


• More than six hours of employee time (minimum of $100 based on online salary estimators)


• $99 for the coffee pot we were finally sent, at no charge to us


• Additional time for the employees working in the warehouse, accounting and other related departments


• Opportunity costs — employees dealing with us could not be serving other customers


• Serious erosion of customer loyalty and goodwill

This company spent at least $500 – for a $40 mistake. That’s a serious problem for companies where employees have thousands of customer contacts a week.

Often these employees earn the lowest wages, are given strict protocols to follow, have no decision-making authority and lack a clear understanding of how what they do contributes to business success. Sometimes they are treated like children who can’t be trusted— we have been in call centers where employees are required to ask permission to use the bathroom!

Imagine if these front-line employees had the same knowledge and decision-making authority as second-level supervisors, and understood how what they did contributed to the success of the whole. They could grant exceptions to satisfy a customer in the moment.

Do they have to understand the difference between fixing a $40 mistake and a $500 mistake? Absolutely. That is why business literacy is essential. The upfront investment in helping employees understand the business will pay bigger dividends than the back end cleaning up of a customer service mess.

WILL YOU CHANGE YOUR ORDER, PLEASE?

The diner’s menu touted its mac ‘n’ cheese, World Famous since 1929! Jamie decided he had to have some — for breakfast.

No doubt the waitress was a little surprised. It was 10:30 a.m. on a Saturday morning, and most people were slamming down waffles, fried eggs or omelets with a side of bacon. But Jamie really wanted the World Famous mac ‘n’ cheese.

“I’m sorry, but we don’t serve mac ‘n’ cheese until lunchtime,” she said regretfully. “And that doesn’t start until 11:30 a.m.” Jamie looked crestfallen. “Really? I had my heart set on the mac ‘n’ cheese,” he said. “I guess we need a few minutes to order then.”

This story could have ended with two eggs over easy, ham and home fries, but a few minutes later, the waitress returned.  She’d asked the cook:  He would make Jamie mac ‘n’ cheese. For breakfast.

It got me thinking about my short-lived career as a waitress, long long ago. It never would have occurred to me to ask the cook to deviate from an established work process when a customer came in with a unique request. In training, I had been drilled: No substitutions. Breakfast, lunch, and dinner were circumscribed by specific times on the clock. We operated by the rules, policies and procedures. And it made perfect business sense — the kitchen needed to be set up in a way that allowed cooks and servers to efficiently deliver meals to large numbers of people.

So on that Saturday morning, we applauded the waitress and the obliging cook for “breaking the rules” and transforming a disappointed and grumbling man to a grinning extremely satisfied customer.

But let's just imagine, for a second, if restaurant policy had required our waitress to ask the assistant manager if the cook could change a work process to make mac ‘n’ cheese for breakfast.

And the assistant manager had to call the manager….

And the manager needed to get permission from the regional manager….

And the regional manager had to submit a request for approval from the corporate Vice President….

By the time a decision was made, the opportunity to quickly and easily satisfy a unique customer request would have gone up in frying pan smoke.

Did the waitress and cook need to understand what it would cost to deviate from a work process in order to satisfy the customer? Absolutely. If Jamie had wanted something more complicated — or something not even on the menu — the answer would likely have been “no.” But thanks to two business literate employees, the waitress got a big tip, the restaurant won a special place in our hearts, and Jamie had plenty of carbs to burn on his bike ride home.